LONDON (Alliance News) - Signet Jewelers Limited Tuesday said that sales in the third quarter of the year, rose 7.7% on a constant exchange rate basis, driven by a strong trading performance from its Kay Jewelers stores.
The jewellery and watches retailer, which operates under a UK and a US division, said that sales increased to USD771.4 million in the 13 weeks ended November 2, from USD716.2 million a year earlier. It said that sales were driven by Kay same store sales increasing by 5.8%, boosted by particularly strong sales of bridal, colored diamonds and watches.
The group reported a lower pretax profit of USD50.7 million in the 13-week period, compared with USD51.6 million the prior year, and USD297.1 million in profits before taxes in the 39 weeks to November 2, up from GBP290.3 million a year earlier.
Signet said that it expects same store sales to continue to increase in the fourth quarter, with a gross margin similar to last year. It also said that its plans to invest up to USD185 million in 2014, on new store opening and remodels, its digital and IT infrastructure, and outlet channel development.
During the quarter, same store sales increased 3.2%, while e-commerce sales increased to USD22.8 million, compared with USD19.6 million the prior year.
Regionally, sales in the US rose to USD632.1 million, from USD575.6 million in the same period a year earlier, as its Kay and Jared stores saw increases in both transaction counts and average transaction value, while UK sales fell to USD139.3 million, down from USD140.6 million the prior year. It said that while the number of UK transaction increased, average transaction value declines, partly due to Rolex watches being offered in fewer Ernest Jones stores.
Signet said that its recent acquisition of Botswana diamond polishing factory is expected to improve reliability and consistency in the supply of diamonds to its customers.
"It will also help us to achieve further efficiencies in the supply chain, while we continue to strengthen our relationships with our existing vendors," said Chief Executive Officer Mike Barnes in a statement.
Signet Jewelers shares were down 0.9% Tuesday afternoon at 4,716.00 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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